A Comprehensive Look at CRS's Dividend Performance and Sustainability
Carpenter Technology Corp(CRS, Financial) recently announced a dividend of $0.2 per share, payable on 2023-12-07, with the ex-dividend date set for 2023-10-23. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Carpenter Technology Corps dividend performance and assess its sustainability.
What Does Carpenter Technology Corp Do?
Carpenter Technology Corp supplies specialty metals to a variety of end markets, including aerospace and defense, industrial machinery and consumer durables, medical, and energy, among others. The company's segment includes Specialty Alloys Operations and Performance Engineered Products. It generates maximum revenue from the Specialty Alloys Operations segment. The SAO segment is comprised of the company's major premium alloy and stainless steel manufacturing operations. This includes operations performed at mills primarily in Reading and Latrobe, Pennsylvania, and surrounding areas as well as South Carolina and Alabama.
A Glimpse at Carpenter Technology Corp's Dividend History
Carpenter Technology Corp has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Carpenter Technology Corp has increased its dividend each year since 2004. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 19 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Carpenter Technology Corp's Dividend Yield and Growth
As of today, Carpenter Technology Corp currently has a 12-month trailing dividend yield of 1.31% and a 12-month forward dividend yield of 1.31%. This suggests an expectation of same dividend payments over the next 12 months.
Extended to a five-year horizon, this rate increased to 1.50% per year. And over the past decade, Carpenter Technology Corp's annual dividends per share growth rate stands at 1.50%. Based on Carpenter Technology Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Carpenter Technology Corp stock as of today is approximately 1.41%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Carpenter Technology Corp's dividend payout ratio is 0.70. And this may suggest that the company's dividend may not be sustainable.
Carpenter Technology Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Carpenter Technology Corp's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 8 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Carpenter Technology Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Carpenter Technology Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Carpenter Technology Corp's revenue has increased by approximately 4.60% per year on average, a rate that underperforms than approximately 56.79% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Carpenter Technology Corp's earnings increased by approximately 284.90% per year on average, a rate that underperforms than approximately 0.49% of global competitors.
Conclusion
Based on Carpenter Technology Corp's consistent dividend history, fair growth prospects, and profitability rank, the company presents a compelling case for dividend-focused investors. However, the sustainability of its dividend is questionable due to its high payout ratio. Therefore, potential investors should exercise caution and conduct thorough research before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
